Saturday, August 27, 2011

Fact checking

Update: the version I submitted to the Herald-Independent can be found here. The links to the data I reference are here:

WI pK-12 spending as a % of GDP:

WI pK-12 spending in inflation adjusted dollars:

1998-99 School year expenditures per pupil:

FY2008 Expenditures per pupil:

Original Post:

Total Wi school funding in 1998 was $7,527, not the $4,956 reported by Sunny in her recent column. Corrected for inflation that's $9899. In 2008 average spending was (correctly reported) $10,791. In real dollars that's an 8% increase, less than 1% per year, not the whopping 64% increase reported by Sunny.

So were did that 1%/year go? Not into the pockets of teachers, who have been losing ground to inflation in the last decade, and not into smaller class sizes (average class size has been creeping up in Wisconsin.) No, any employer will tell you that health care costs have been increased by more than 50% over this period - and school districts feel the same effects. The fact that cost increases are slowly squeezing the life out of our schools is another reason we need to fix the broken health care system in this country.

On with the facts: In 1998 scores on the NAEP (National Assessment of Educational Progress) ranked WI in the top 3 among states- but Wi scores have stagnated while the rest of the nation has (on average) been improving significantly. In the latest results WI ranks 15th and falling. These results mirror the funding situation: In 1998 WI had schools among the best funded in the nation, but since then funding has stagnated while on average other states have increased spending. Between 2000 and 2009 average spending in the US on education has increased 17.9%, while in Wisconsin spending has been flat since 2003. As Wisconsin funding for schools sinks to the national average, our test scores have also.

More facts: spending on schools has been sinking as a share of GSP (Gross State Product) for more than a decade. The education "piece of the pie" is smaller than it has been. That means public schools are more affordable now than in 1998, and educational professions are becoming less attractive compared to other endeavors. The recent changes to WI school funding will probably put us below the national average - we should not be surprised when our test scores follow.

These facts reinforce something simple I learned long ago: You get what you pay for. Education is not exempt. I wish our politicians could learn it too.

PS: Apparently Sunny got taken in by CNS news- a Conservative "news" organization which falsely reported the 1998 number - using a slight of hand to link to the wrong report from NCES.


Anonymous said...

So please turn this into a letter to the editor. More people probably read Sunny's column than this blog.

Mike Mikalsen said...

Peter, I agree people can find all sorts of facts to sustain a particular viewpoint. However, your response to Sunny's column seems to equate more spending with higher academic performance.

Your response also ignores that Wisconsin still ranks very high in per pupil spending, but our academic performance on many indicators has not improved. The taxpayers have not been getting a solid return on educational investment in this state for the last two to three decades.

Also, your reference to health care costs being the driving force behind higher spending is somewhat misleading when you consider the union contract provisions this district has financially suffered under for many years.

Didn't the school board get some savings, but renewed union contracts to avoid the full implementation of the Collective Bargaining Reforms. It is a fact the school district could have saved more money through the Collective Bargaining Reforms being adopted immediately. Those dollars could have been put into direct instructional efforts to improve student performance.

I can understand your point about Sunny's column. However, your response is also based on an ideology or belief that higher spending in K-12 automatically equals better student performance. And that you failed to provide any evidence to support.

Peter Sobol said...

Hi Mike - The point Sunny made was to perpetuate the myth that spending on schools has significantly increased in recent years, but that spending has not improved schools. As we have seen this is false, and my purpose here was to refute that falsehood, not explore the potential relationship between funding and outcomes. Sunny made the positive assertion that increased spending doesn't increase performance - but there is no evidence of that.

The facts are that we haven't increased spending in recent years. Despite the contract provisions the average teacher salaries have been falling behind inflation for a decade or more. Its a little hard to argue that the contracts are financially onerous when the teachers are continuously losing ground.

Whether or not more spending results in better outcomes in education is of course a larger discussion - and it certainly depends on how that money is spent. But Wisconsin no longer ranks high in per pupil spending - we are 17th in the nation, just a little above the median, and that was before the recent large budget reductions. On the other hand, if you take state by state per pupil spending and compare them against NAEP results you find there is a correlation with better than 99% probability of significance. (to be specific the F-ratio is >11.5). So yes there really is strong evidence of improved academic performance with increased spending.

I think a significant problem in Wisconsin is that for the last 13 years school boards and administrations have been on a perpetual budget reduction treadmill (due to funding limits and increased costs) that has really interfered with the ability to focus on improved outcomes. Another factor is that as compensation has slipped the teaching profession gets less and less attractive - the number one factor in outcomes, the quality of the teacher, will slip - its inevitable free market economics: teaching has to compete with other career choices that haven't been losing ground.

As for the contract, the teachers in the district agreed to the 12.8% health care contributions, 50% of the WRS payments, relief on the OPEB liabilities - amounting to significant cuts in pay and compensation. I'm not sure what additional savings you think could be realized, other than further cuts to salaries (and we are still required to bargain salaries!). As far as I know "direct instructional efforts" involves putting teachers in front of students- you can't put more money into the classroom by taking it out of teacher's pockets.

I should rephrase - in the end you may get what you pay for. You can get less, but you never get more. The hypothesis that outcomes will improve if you increase spending hasn't been proved, but the evidence strongly suggests it should be tried if that is the goal. (I know precisely what I would do with it - adopt management structures that have become standard in the private sector - but that schools don't have the resources to deliver.)

Anonymous said...

Thanks for answering here. In my view the trouble with the governor and many of our pols is that they have never actually held a real job of significance where they actually have to deliver something of substance, so they really don’t know how to do it. The governor’s vacuous statements about “tools”(which you echo above) is a prime example of the fact that he really has no idea what he’s talking about. However, since us ordinary folks never get to ask him the tough questions perhaps you would be so kind as to explain to us in what ways the collective bargaining law allows schools to deliver more dollars to direct instruction. Isn’t cutting teacher’s salaries actually taking money away from direct instruction? Please be specific.

Anonymous said...


Thank you for this post. I think people are bad with inflation. People know what it is, but when they see the results, it's hard to accept. School districts also have trouble hiding rising costs the way private businesses do (see for examples).

Both of these facts combine to give a false impression that the costs of education are growing too fast, when your post puts it into much better perspective. Thanks again.

Mike Mikalsen said...

The inflation adjustment comparison is somewhat of a smoke screen. In many years over the last two decades, K-12 education expenditures have increased at a rate higher than inflation.

I recognize that some will defend this by the simple argument of cost to coninue in budgeting. However, that is nothing more than an excuse for higher spending.

Peter, why do you focus solely on teacher salaries. The true cost of an employee is the figure that represents total compensation (salary, benefits and other costs).

Most school districts in this state have not been on a perpetual treadmill of reductions. In fact, K-12 expenditures have increased year after year. The QEO and state imposed revenue limits only slowed the rate of spending increases for most school districts.

As you point out the district opted for "relief" of OPEB liabilities. The Collective Bargaining Reform Law would have allowed the school district to eliminate most of these unfunded costs. And that would not have impacted an employee's eligibility for guaranteed state retirement benefits.

The costs of the extra retirement benefits (OPEB liabilities) come directly from dollars that would be available for classroom expenses. That is a policy choice made by the school board. The Board could have made another choice and used those savings to fund direct educational activities.

I do share your concern that spending choices can limit the effectiveness of a school district in many ways. However, I would note that is why we elect school boards to make those critical decisions and why unions should not have a say in that localized process. Individual employees should be consulted prior to policy decisions. It just means that the elected school board should have the final say and not an entity focused solely on the interests of one group.

Peter Sobol said...

Hi Mike-
I agree that the inflation adjustment numbers are a bit of smokescreen - we really should be comparing as %GSP. The reason: Over time average compensation increases at the rate of GSP, not the slower rate of inflation. If one segment of the economy is limited to inflation, they will be left out of the general increase in wealth in the rest of society. For example the average annual income in 1913 was about $650- if you limited compensation to the rate of inflation then a teacher would only make $15000 today- and obviously no one would teach. If teacher compensation doesn't keep pace the economy it will over time be unable to attract qualified people - this is basic supply and demand. My basic argument is that the education "piece of the pie" should remain the same, instead of consistently shrinking the way it has been doing since 1992:

I also have to disagree with your statement about inflation adjusted increases in education funding. Yes, funding increased for two years in the mid-90's (during the economic boom of that period which brought significant increases in tax revenue) but since 1998 spending has been essentially flat (within 1%). If you have different numbers then please point me to where I can find them. I'm looking here: . From all the data I can find, in real terms K-12 expenditures have NOT been significantly increasing each year - that much is clear.

OPEB liabilities are future costs for employees who haven't retired. Eliminating these benefits would result in zero immediate savings and little savings for many years -savings aren't realized until there are a significant number of new retirees. So no, there wouldn’t be any savings to be spent in the classrooms for now. Indeed eliminating OPEB benefits would probably cost more in the short term as higher paid senior teachers delayed retirement. (The OPEB benefits were originally designed to save money by encouraging teachers to retire during their higher paid years -- to be replaced by younger lower paid staff. It was only the dramatic increase in health care costs that changed this equation. )

Further, the OPEB benefits have been part of the teacher's total compensation for decades, and many in the staff have planned their lives around this deal. It represents an essential contract with these employees and I can't in good conscience simply renege on that. Obviously the OPEB liability of the district is unsustainable has to be mitigated, but it must be done in a way that honors the commitments made by the community to its employees.

The freedom of a group of people to assemble to advocate for their own interests is fundamental to the american system and it happens at every level throughout our society, from unions to political advocacy groups and lobbying at the highest levels. Anyone not allowed to assemble for self-advocacy is placed at a competitive disadvantage that is patently unfair. There can be no justification for singling out one group for exclusion.

As Ronald Reagan said: “Where Collective Bargaining Is Forbidden, Freedom Is Lost”. I've said it before: collective bargaining makes my job more difficult, and the rules of that process are problematic - but as an american I can't question the right for teachers to negotiate as a group just because I'm unhappy with the results. To do so would bring in to question my right to assemble for advocacy on issues of interest to me.

Anonymous said...

re:"The true cost of an employee is the figure that represents total compensation (salary, benefits and other costs)."

Of course this is the true cost, but the data is clearly used to pit the public against teachers and other public workers. Most people don't know what their total compensation is, only their salary. So people hear some number that's $20,000-$30,000 more then their take home pay, and think the public workers have that much more money to spend.

The reality is, total compensation is pretty close between public and private workers. Comparing education level, public workers total compensation is usually lower then a comparable group of the private sector. But this data is usually omitted because of the effect described above.

And while the benefits are great, the reality is nobody can buy food with their health insurance. Nobody can buy a house with retirement contributions. To balance that total compensation number with a higher benefit side, means that public workers have less in take home pay. As Peter points out above, this is far more important in attracting people into the profession.

Mike Mikalsen said...

Peter, you may want to consult Informational Paper 26, State Aid to School Districts, prepared by the Wisconsin Legislative Fiscal Bureau.

K-12 education in Wisconsin is funded from two main sources. Those sources are state aid and local school district property tax levies. Since 1993-94 through 2009-10, the consumer price index (CPI) averaged 2.5% annually. The range of CPI during that 17 year period was -0.4% in 2009-10 to 3.8% in 2008-09.

Total school costs (expenditures) during that 17 year period increased by 4.2% annually. The range of total school costs annual increases was from 1.8% in 2003-04 to 6.4% in 1996-97.

Total K-12 school spending annually increased at a rate higher than CPI in 15 of the 17 years. This is actual data prepared by the nonpartisan Legislative Fiscal Bureau in consultation with data from the Department of Public Instruction.

Now, I recognize there are those folks that will argue K-12 education spending should be unlimited. I also know that you are not one of those folks. However, the fact remains that the State of Wisconsin, under the leadership of both Republicans and Democrats, has committed a massive amount of taxpayer resources to education. Under both parties, K-12 school aid has been the single largest expenditure from the state’s general fund.

Reasonably, the taxpayers can only be expected to provide resources that it can afford. There is a legitimate debate regarding the input of resources into K-12 education in this state and the outcome (mainly student academic achievement).

In regards to the OPEB benefit costs, it is unfortunate that school districts have not been required to allocate funding each year for these committed costs. The new accounting and actuarial rules will require school districts and other government units to document and enumerate these costs. That will allow for a real world accounting for the unfunded and under-funded nature of these benefit costs.

I respectfully disagree that these benefits don’t have a cost to the MG school district until an individual retires. It is time the families and taxpayers to know about the full costs of employee benefits (and I am not referring to teachers only). There are clearly policy decisions that are made as a result of these current and future costs. Those policy decisions have a direct impact on classroom instruction and student achievement.

I also respectfully disagree with your take on collective bargaining. We obviously have a different value system. I place a higher priority on students and their experience in our schools and a lesser value on the privilege of a group to form to advocate for employees’ interests.

That doesn’t mean I care less about the plight of our district’s employees. Instead, I look at them as individuals and as professionals in their ability and performance.

As a conservative, I have never put much credence in group think or collectives.
In fact, I believe there are many high performing, professional teachers in our district that are underpaid and undervalued because of unionization.

That also is an unsustainable practice long term economically and in regards to student achievement.

Anonymous said...

No matter where you land on the political spectrum it is now pretty clear that the teachers' union model has utterly failed them. Even before Walker and his cronies the collective bargaining model left teachers feeling resentful, disrespected and under compensated. Of course compared to the current state of affairs, it was much better, but that's only in hindsight. Now, without collective bargaining, they feel even more resentful, disrespected and under compensated but it's only a matter of degree. Clinging to a model born out of coal miners and auto workers has proved to be a disaster for teachers and now they are left with nothing. The choice to move to a more professional, collaborative model could have been made years ago, but organizations such as WEAC did not push for this, nor did their members push their leadership for a model that was more functional. Like a lot of unions, WEAC's leadership had a self interest in perpetuating itself rather than caring about their memebership and their membership let them get away with it. I can't stand FitzWalker either, but maybe it's time to stop putting so much energy into hating them and looking at how we got we here and where we need to go. The public unions laid the groundwork for their demise and until that is acknowledged there will be no movement forward and it's too late to turn back.

Peter Sobol said...

NB: Two comments above got stuck in the spam filter and weren't published for a couple of days. Mike - thanks for the pointer to the financial analysis. I'll look into it.

Peter Sobol said...

Mike-the data in the report you present disagrees in signifcant ways from reported reported by NCES. At least in part the discrepancy is explained in the text:

"(b) the cost incurred for the operation of the CESAs; and (c) the cost incurred by
CCDEBs. The total school cost measure for 1999-00
and subsequent years includes the above, plus
transportation, facility acquisition, and community
service costs, less the cost incurred for CESAs and

In other words the table shifts it metric in 1999-00 adding in several factors, so I have to say that drawing conclusions from the data over the time period is questionable. The NCES appears to use a consistent measure across the time period.

That said, if we take the numbers from the state legislative report at face value we find that average increase between 1998-99 and 2009-10 adjusted for inflation is 1.15%, which is not in a practical sense different from my original estimate of 0.8% percent.

I'll stand by the original numbers, but we can agree from either set that any increases in education spending over the time period is modest at best, not the whopping numbers reported by Sunny and elsewhere. True?

I'll also stand by my assessment that these increases have not kept up with district costs, primarily as driven by the dramatic increases in health care costs (that have affected ALL employers). Health insurance costs are somewhere around of 15% of total district expenses. I have difficulty finding the price increases in health care over this period, but if you take the LOW end reported, (around 65%) this more than eats up any increases in education spending. So in reality there is no more money available to schools over this period to spend on improving instruction unless they make cuts elsewhere.

In 1998 WI spent 16% more than the national average per pupil, by 2008-9 that number slipped to 5%. We clearly aren't a high spending state anymore, we are essentially average. Unquestionably, as a % of GSP, we spend significantly less now than we did in 1998- education in WI is more affordable and less of a burden on the taxpayer than it was 10 years ago.

In the end though its not a matter of whether or not education is the largest portion of the state budget, its a question of whether or not the available funds are sufficient to provide an education commensurate with the needs of society, present and future.

Mike Mikalsen said...

Hi Peter,

I think both of us can make strong points by filtering or softening the data. However, the real discussion centers on "how much is enough" for K-12 education spending levels on an annual ongoing basis.

There can many reasonable explanations as to why the cost to continue budgeting in education drives up spending. The pre-1993 school funding process was unsustainable in terms of property taxes.

The 2/3 funding system adopted post-1993 put the state on a path of fiscal destruction. That commitment was the leading cause of Wisconsin's constantly growing structural deficits. It was unsustainable.

The Great Recession leaves little doubt that the State of Wisconsin is unable to spend on an unlimited basis for K-12 and higher education. This fact is economically undeniable.

Yes, health care costs did increase substantially for school districts. A small part of those increases was due to the overall costs of healthcare.

The largest part for school districts was the health care benefits being offered to employees. These packages exceeded in coverage and cost the packages found in the private sector. Again, these negotiated structures were and are still fiscally unsustainable.

Finally, we both agree that in the end K-12 education finances come down to philosophy. How much is enough? And can taxpayers and the economy afford those levels of punitive taxes.

Anonymous said...

That's just not true Mike. My health care benefits have not significantly changed in 10 years. The costs are up because overall medical costs are up, not because we are getting an improved benefit. To say the increase wasn't due to the overall cost of healthcare is simply false.

Jeff Simpson said...

Great discussion and loved all the figures thrown out and yet in the end Peter has it right:

Finally, we both agree that in the end K-12 education finances come down to philosophy

No facts and figures can change that. One side feels that education is one of the most important things we can focus on in our society and the other side(that is unfortunately in power for the moment) wants to privatize. What Scott walker and the republicans are doing to our state has absolutely NOTHING to do with education "reform" and everything to do with privatization of education. Of course with a side order of hurt the democratic base thrown in.

It is the SHock Doctrine in action right in our very state. (For those of you not aware of what the Shock Doctrine is, it is where corporations use catastrophes to maximize profit). They used to try and hide it but now they have no qualms they let everyone know what they are doing, you just have to listen. This from the New York Times last week.

"Let's hope the fiscal crisis doesn't get better too soon. It'll slow down reform." -- Tom Watkins, a consultant, summarizes the corporate education reform movement's current strategy to the Sunday New York Times.

It is not about resources whatsoever. For example, if we need to pay a law firm in a no bid contract $400/hr to defend a questionably legal bill that your going to drop on the people of WI, no problem. If you want to bring in police from all over the state to the tune of $8 million dollars to play political theatre and pretend you are in constant danger from "union thugs" no problem. Want to go to war in Iraq, No problem. Want to run fake democrats in a primary that costs the taxpayers an unecessary $500k, dont even blink. Want to force people to get an ID to vote to fix a non-existent problem, to the tune of approximately $10 million a year, absolutely! You get the point.

Try to pay a teacher a living wage and we are flat broke.

Now lets look at a couple other things that have been left out of this discussion. We have been cutting money from schools for as long as I can remember, this year just happened to be the worst. If you look at all of the education studies you will find some constants.

1. teachers are the SINGLE MOST IMPORTANT factor for kids academic achievement within the schools.

That being a given, how that affects the students does not even come close to some of their outside factors that teachers have no control over. IE

* Socio Economic background
* Education Level of the Parents
* Poverty Level
* English language skills
* neighborhood Violence

A teacher has to teach 20+ Kids(and growing) despite each kid in class having differing levels of these and other factors. Then we continue to not only cut support staff and other "fringe" areas like SEA's social workers, Counselors, along with the Arts, PE, etc... Lets not forget that many of these kids are trying to learn in buildings that are crumbling down around them. Education is an investment in our future and in our country and right now we are seriously lacking. We are short changing our kids for political power and it really needs to stop.

Jeff Simpson said...

on a quick side note

I love how Mike said:

As a conservative, I have never put much credence in group think or collectives.

that made me laugh since a vast majority of republican WI legislators just got back from their all expense paid trip to the ALEC convention. For those that do not know ALEC( is a shadow group that buys politicians then has them write legislation for them Many Wi representatives(robin vos/pam galloway etc.) actually are so bought in they actually introduce the ALEC legislation as written for them without even changing a word. Then of course there are other "collectives" like Wisconsin Manufacturers and commerce or Associated Builders and Contractors who are actually based in WI and also write legislation. They all donate heavily to the republican party so their "collective/group think" seems to be A-ok.

Jeff Simpson said...

on a quick side note

I love how Mike said:

As a conservative, I have never put much credence in group think or collectives.

that made me laugh since a vast majority of republican WI legislators just got back from their all expense paid trip to the ALEC convention. For those that do not know ALEC( is a shadow group that buys politicians then has them write legislation for them Many Wi representatives(robin vos/pam galloway etc.) actually are so bought in they actually introduce the ALEC legislation as written for them without even changing a word. Then of course there are other "collectives" like Wisconsin Manufacturers and commerce or Associated Builders and Contractors who are actually based in WI and also write legislation. They all donate heavily to the republican party so their "collective/group think" seems to be A-ok.

Jeff Simpson said...

Finally how do we fix it.

1. We need to make education a priority! In the 60's JFK made it his mission to be the first to the moon and the country bought into his mission. We need a misson now to have the best PUBLIC education system in the world.(FYI - cutting 1.6 billion is NOT making education a priority)

2. Stop demonizing teachers! Yes the republicans are demonizing teachers( if you dont believe me check out . In New Berlin Vicki Mckenna told her listeners to bring pacifiers to hand out to teachers who wanted a say in their work rules). We need to attract the best candidates into education and right now we are scaring them away.

3. FIX our schools. It is ridiculous that some kids have to go to crumbling schools everyday while the richer suburbs kids get to learn in immaculate state of the art classes. Lets give all kids an equal chance. Intelligence is not bound by color or location we need to bring out the best in every kid.

4. Bring back the teachers unions. You cant say "education reform" with a straight face when you do not allow teachers a seat at the table. That would be like not listening to the world's scientists on the dangers of global warming(oops forget that one). As i have stated in a previous LTE if Collective Bargaining has caused the teachers unions to run roughshod over the "taxpayers", why is the average salery of a WI teacher $53k a year? If they always got their way, why wouldnt they be making banker money or wall street money or at the very least politician money?

5. Stop with the standardized tests. All NCLB has done is increase the standardized testing industry immensely(that privatization again) and has seriously hurt our education standards. tests are fine as a baseline to check progress biut not as a standard of evaluation. What makes a school strong is a strong administration, and school board and having a strong curriculum where teachers are continually advancing their education and learning NOT doing well on the standardized tests.

As Derek Bok has said "“If you think education is expensive, try ignorance”!

have a great weekend